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State OKs uranium mill near Naturita

George Glasier, a Naturita rancher, stands with his wife, Kathy, at the site in Paradox Valley where Energy Fuels Inc., a company he founded and of which he still is a major stockholder, plans to build a uranium processing facility.

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Thursday, January 6, 2011

Construction on a $150 million uranium mill in the west end of Montrose County could begin toward the end of this year now that the project has cleared a major hurdle.

The radiation program of the Colorado Department of Public Health and Environment on Wednesday issued a radioactive materials license to Energy Fuels Inc. for the Pi&#241on Ridge mill, which would process 500 tons of ore per day on a site about 12 miles west of Naturita.

The mill would be the first of its kind to be built in the United States since 1981.

The announcement by state regulators was a boon for the stockholders of Energy Fuels, a Toronto company. Shares jumped from 15 cents to $1 on Wednesday on the Toronto Stock Exchange.

“It was a long time in coming, but we finally got it,” said Naturita rancher George Glasier, who founded Energy Fuels and still is a special consultant and major stockholder.

The company will operate the facility and the related mines through its wholly owned subsidiary, Energy Fuels Resources Corp., which is based in Lakewood.

Proponents of the mill, who include Montrose County officials, hailed the license, while opponents denounced the decision.

“I think it’s correct and well-studied and a real opportunity for the nation and state of Colorado and Montrose County to move forward,” Montrose County Commission Chairman Ron Henderson said. “This a real opportunity for us to start helping ourselves.”

The Sheep Mountain Alliance, based in Telluride, was preparing to submit a letter of opposition containing 250,000 names from around the region and around the country just as the decision was announced, said Hilary White, executive director of the alliance.

“There is tremendous concern out there and the state has received petitions and signatures from individuals and organizations and it chose to ignore those,” White said.

She said opponents of the mill were going through the 432-page licensing decision on Wednesday. White called the ruling “rushed” and said the announcement was unnecessarily self-congratulatory.

The agency’s “expressing excitement that this is the first conventional uranium mill in a generation” was galling, White said.

Process defended

Energy Fuels Resources obtained a county special-use permit for the mill in 2008 and its application for a license had been before the state agency for 14 months. Over that time,a staff of eight professionals consulted state and local agencies, submitted some 400 requests for additional information to Energy Fuels and took other action to conduct the department evaluation.

“It has been a very rigorous process,” said Warren Smith, community involvement manager for the hazardous materials and waste-management division of the health department.

“This is an important project and we have done an exhaustive evaluation of the science behind it,” Smith said. “As we have said throughout the process, this is a technical evaluation. It’s not a popularity contest and it’s not a vote.”

The evaluation, however, didn’t include responses from regulators to comments from the public, the Sheep Mountain Alliance said in a statement.

“Among the concerns is that CDPHE staff spent hundreds, and perhaps thousands of hours, working hand in glove with the Canadian company, but refused multiple requests to provide answers to questions raised by Colorado residents,” the alliance said.

“I think their process has been flawed all along,” White said. “They chose to ignore public comment.”

Among the concerns raised by opponents were fears that air quality in Telluride would be affected.

The licensing process studied the issue and, “We found there was no scientific basis for those fears,” Smith said.

Opponents contend that Energy Fuels’ plans for an emergency are inadequate, that its plan to contain radioactive waste falls short of state standards, and that it will harm the economy that has developed there.

Trading halted

The health department had set a Jan. 17 deadline to decide whether to issue the license, but Energy Fuels President and CEO Steven P. Antony said the agency “caught us flat-footed when they walked in with the license” Wednesday morning.

At the soonest, construction could start in the last quarter of this year and would take about a year, meaning production could begin in late 2012, “if all goes well,” Antony said.

Company officials anticipated a jump in the stock price once news of the license was out and they issued the stop order on the Toronto stock exchange, Antony said.

“Unwavering local support” for the mill was significant in getting approval, Antony said.

Glasier was feeding his horses when his wife, Kathy, got news of the license from a New York investor, she said.

Uranium prices are on the upswing, so the timing for the mill appears to be propitious, Glasier said.

“I think the whole area is going to benefit from uranium activities,” Glasier said.

Among the requirements for the project to move ahead, Energy Fuels must post an $11 million bond for decommissioning and set up a long-term care fund for workers of $827,590 in the state treasury.

The health department is mindful that it’s working on the kind of project that hasn’t been tackled in the United States for decades, said Steve Tarlton, radiation program manager.

Because of anagreement Colorado has with the Nuclear Regulatory Commission, the federal agency has no jurisdiction in the state.

“Our requirements are more stringent than those of the NRC,” and other states that are considering uranium mills are looking at Colorado’s process, Tarlton said. “We do think this will set a national precedent.”